PHR CHAPTER 5: TOTAL REWARDS

Q. A total rewards philosophy can help achieve an organization's strategic goals by doing which of the following? A Attracting and retaining employees with the necessary KSAs B. Establishing a pecking order for jobs in the organization C.Positioning the company to lead the compition for employees D. Maintaining the entitlmenent culture

Ans . A - total rewards philosophy helps determine what kind of employees will be attracted to the organization. Developing a philosophy to target employees with the KSAs needed by the organization can help advance the organization's mission. The pecking order for jobs (Option B) is based on the value of those jobs to the organization. The philosophy defines leading the competition as a strategy; positioning the company to do so (Option C) is a result of creating the compensation structure. An entitlement culture is maintained (Option D) by continuing to pay employees for time on the job instead of for performance.

Q. An entitlement culture is appropriate for a business that needs what type of workforce? A. One that continues to show productivity increases over time B. One that has a line of sight to retirement C. One that is highly competitive in completing daily assignments D. One that has a skill set that's in high demand

Ans A - . An entitlement culture rewards longevity in the job. If increased productivity is a function of time on the job, an entitlement culture will encourage employees to stay with the company. Line of sight (Option B) occurs when employees know that their performance impacts their pay. A highly competitive workforce (Option C) is more likely to exist in a pay-for-performance culture. A workforce with a highly desired skill set (Option D) would be better served by a pay-for-performance culture.

Q. Which of the following expenses may generally not be used against a flexible spending account? A. Gym membership B. Durable medical equipment C. Acupuncture D. Psychiatric care

Ans A - . Gym memberships are not reimbursable under flexible spending accounts. Psychiatric care (Option D), durable medical equipment (Option B), and acupuncture (Option C) are all allowable expenses.

Q Which of the following is not an example of a voluntary benefit? A. Medicare B. Vision insurance C. Qualified pension plan D. Sick pay

Ans A -. Medicare is a type of involuntary benefit introduced by the Social Security Act of 1935. Along with retirement (Social Security), these mandated benefits are subsidized by a tax on both the employer and the employee called FICA (Federal Insurance Contribution Act). Vision, retirement, and sick pay (Options B, C, and D) are all examples of voluntary benefits that employers may choose to offer their employees.

Q. Earnings before taxes are most commonly referred to as which of the following? A. Gross pay B. Net pay C. Employee burden D. Wages salaries and tips

Ans A. Gross pay is the amount paid to an employee based on several factors, including the employee's base pay rate, shift differentials, tips, and bonuses; how many hours the employee worked during the pay period; and whether any paid leave was used. It is the amount due to an employee before any mandatory or voluntary deductions are made. Once the deductions are taken out, employees receive their net pay (Option B), often the amount that is referred to as "take-home pay." The burden rate is the amount of indirect costs of employment, such as workers compensation insurance (Option C), and wages, salaries, and tips (Option D) is only one component of calculating gross pay.

Q. The employer you work for has a marketing specialist who is an independent contractor. She is required to work three days a week, from 8:00 a.m. to 5:00 p.m. You have advised your employer that she is improperly classified and should be hired as an employee. Which IRS factor are you most likely basing this on? A. Behavoural B. Finlancial C. Type of Relationship D. None, her classification is legally compliant

Ans A. Improperly classifying a worker as an independent contractor can several factors. Behavioral factors include the degree of control an e and the way a worker performs the work. Financial factors include h and how expenses are reimbursed (Option B), and the type of relationship determined by the presence of written contracts or benefits (Option relationship should be reviewed when making a determination of wo

Q. Cost of living adjustments are generally tied to which economic factor? A. Consumer price index B. Social security index C. Employment cost index D. Producer price index

Ans A. Wage compression occurs when employer pay rates do not keep up with external market conditions and the economy as a whole. When the cost of living goes up, pay rates should be adjusted as well. For this reason, employers often tie pay increases to the consumer price index published by the Bureau of Labor Statistics (BLS).

Q. What impact does a gig economy have on an employer's compensation plan? A. Gig workers usually have a higher base pay. B. HR must budget compensation costs differently. C. HR must ensure they are not discriminating against gig workers. D. Gig workers may still be entitled to mandated benefits.

Ans B - . HR must budget compensation costs differently.B. With the rise of independent con creating a "gig" economy, HR must for labor differently. The employee will be different, and depending on nature of the contractors, the labor may need to be calculated on a pro basis. Gig workers do not necessary a higher base pay (Option A), and employers may not unlawfully disc against any worker (Option C). Tru independent contractors are not el for mandated benefits (such as Soc Security) through an employer (O

Q. In a merit matrix, where would be the best position to place a fully trained employee that is meeting performance expectations and who has been with the company for about three years? A. The minimum for the range B. The mid-point of the range C. The maximum point for the range D. Somewhere between the mid-point and maximum

Ans B. For fully trained employees with satisfactory performance who have been with the company less than five years, the mid-point of the salary range is reasonable. Placing them below mid-point puts them at risk for leaving (Option A), and paying above mid point may mean the employer is overpaying for performance (Option C). Paying them somewhere in between mid-point and maximum would require more information to determine (Option D), such as the supply of the skill set in the labor market.

Q.Job Fulfillment from working with a talented peer group is an example of which of the following types of compensation A. Monetary B. Intrinsic C. Extrinsic D. Total rewards

Ans B. Intrinsic rewards are driven by internal versus external factors. Job fulfillment based on work relationships, the opportunity to use strengths, and career growth are examples of nonmonetary compensation. Extrinsic rewards (Option C) are those rewards that are driven by external factors, usually in the form of monetary (Option A) or benefit rewards (components of a total rewards system [Option D]).

Q. Which of the following would be the best choice of a profit-sharing plan if the employer wishes to improve organizational productivity through shared management and employee efforts? A. Employee stock purchase plan B. Bonuses C. Gainsharing D. Improshare

Ans C. A key component of a gainsharing plan is the shared responsibility of outcomes between management and employees. Productivity is reviewed, new performance is measured, and both workgroups share in the gain. ESPPs, bonuses, and Improshare (Options A, B, and D) all could be used but are not specifically grown around the concept of shared responsibility between management and employees.

Q. ESOPs, ESPPs, and profit-sharing are all examples of which of the following? A. Deferred compensation B. Gainsharing strategies C. Group incentives D. Sales bonus options

Ans C. Group incentives share common elements including the reward of individuals based on their collective efforts. Employee stock ownership plans, employee stock purchase plans, profit-sharing, and gainsharing (Option B) are all examples of group incentives. Deferred compensation (Option A) refers to tax-deferred retirement plans, and a sales bonus (Option D) is a type of commission paid to workers.

Q Prescription coverage is an example of what type of employee benefit? A. Differed compensation B. Pre requisitst C. Health and Welfare D. Long term care insurance

Ans C. Prescription medication coverage is an example of an employee health and welfare benefit.

8. The state in which you practice HR requires a higher minimum wage than the federal government. Your employer only wants to pay the federal minimum wage. What should you do? A. Make all employees exempt from overtime to reduce hourly wages. B. Conduct market research and create wage bands so he can see what his competitors are paying. C. Tell your employer that paying the federal minimum wage would be unlawful and that the company is required to pay the state minimum wage. D. Agree to pay the federal minimum wage rate, but gradually increase employee pay to the state minimum.

Ans C. The correct choice in this situation is to tell the employer that paying less than the state minimum wage is illegal. However, you may back this statement up by creating wage bands to make the argument that paying within range will help him retain employees (Option B). Options A and D are both unlawful.

7. An unlimited time-off plan has which of the following advantages for the employer? A Employers are better able to schedule workflow. B. The employee does not have to worry about timecards. C. The employee is better able to achieve work-life balance goals. D. The employer does not have to track time-off accruals.

Ans D - From an employer perspective, unlimited time off plans reduce the administrative burden of tracking accruals. Unlimited time off actually can make it more difficult to schedule workflow, so Option A is incorrect. Managing timecards is irrelevant in this scenario, so Option B is incorrect. Option C is an advantage to the employee, not the employer.

Q. What is the purpose of paying employees comissions? A. To keep employee wages at risk B. To reward employees who work harder than others C. To keep labor costs low D. To incentivize employees to behave in a certain way

Ans D. Commission-based pay is a form of incentive designed to drive employee behaviors specifically related to selling products. While it does so by making a portion of employee pay at risk, commission plans may not result in an employee making less than minimum wage and is not the primary purpose of this type of incentive (Option A). Commissions are not always a measure of employees who work hard, so Option B is incorrect. In some cases, employees paid on commission are among the highest paid employees in the organization, so Option C is untrue as well.

Q. A company that wants to reduce the cost of its unemployment insurance should do which of the following? A. Aggressively fight unjustified claims for unemployment. B. Establish an effective performance-management program. C. Terminate employees who violate company policy. D. All of the above

Ans D. Options A and B are both obviously correct. Although Option C may seem counterintuitive to some because many employers are hesitant to terminate employees for policy violations, those terminated for cause generally aren't eligible for unemployment insurance. Because retaining an employee who is not contributing to the organization is a poor business decision, maintaining adequate records to demonstrate the reasons for termination provides the tools to fight claims that are unjustified.

Q. A summary plan description is not required for which of the following? A Defined-contribution plans B. Defined-benefit plans C. Flexible spending accounts (FSAs) D. All of the above

Ans D. Summary plan descriptions are required only for group health plans, and not for defined contribution plans, defined benefit plans, or FSAs.

Q. When several workers at a nuclear power plant call in sick with the flu, the manager calls James and asks him to come in three hours early. James will be paid a premium on top of his normal pay rate for these hours. This is an example of what? A. On-call pay B. Call-back pay C. Reporting pay D. Hazard pay

Ans. B. Call-back pay is a premium paid to employees who are called to work before or after their scheduled hours. On-call pay is provided to employees who are required to be regularly available to respond to work-related issues on short notice and who must be available via pager, telephone, or email (Option A). Reporting pay is given when a worker shows up to their job and there is no work to perform (Option C). Hazard pay is given for dangerous circumstances (Option D). While a worker at a nuclear facility may (or may not) be given hazard pay, in this instance the premium is being given for coming to work early, not for potential hazards.

Q. Which of the following is an example of an intrinsic reward? A. Recognition of accomplishments B. The satisfaction of a job well done C. A great supervisor D. An exciting assignment

Unknown